Insight Into The Whole Strategy Of Jingdong'S Sinking

The performance of sinking market is quite eye-catching in Jingdong's latest quarterly financial report.

According to the financial report, in the second quarter, Jingdong achieved a net income of 2011 billion yuan, a year-on-year increase of 33.8%, a new record in nearly 10 quarters. In terms of users, as of June 30, 2020, the number of active purchase users of JD in the past 12 months has reached 4174.4 million, with an increase of 30 million in the second quarter, a year-on-year increase of 29.9%.

It should be noted that in this Jingdong financial report, sinking market contributed a lot. According to questmobile data, during 618, nearly 68% of the users who newly installed Jingdong app came from third tier cities and below; Jingxi's own new users increased by more than 100% month on month, and 70% of all new users came from 3-6 tier cities.

It's no wonder that at the performance presentation meeting after the financial report, a number of Jingdong executives mentioned the plan of sinking the market. Xu Lei, CEO of Jingdong retail group, stressed that one of Jingdong's key directions in the second half of this year is to further layout the sinking market and industrial belt. Wang Zhenhui, CEO of Jingdong Logistics, also pointed out that this year, Jingdong Logistics will try its best to sink its warehouses to low-level cities, so that more goods can reach customers in low-level markets, and customers in low-level markets can enjoy the services of Jingdong Logistics.

"The overall strategy of Jingdong's sinking market is actually a systematic sinking measure involving all business departments such as retail, logistics and several branches," an industry observer, who did not want to be named, analyzed to the 21st century economic report reporter. "In the future, with the continuous increase of user penetration rate of Jingdong sinking market, it is estimated that there will be 500 million user space."

User growth is the key goal

With a total population of nearly 1 billion in third tier cities and below, the prospect of social e-commerce is considerable. According to the data of China social e-commerce industry development report 2020, the total growth rate of social e-commerce in 2020 is expected to reach 66%, and the scale of social e-commerce will reach 370.1 billion yuan.

In fact, in addition to Jingdong, a number of e-commerce enterprises, including pinduoduo and Taobao, have layout in the sinking market. But in terms of data, this year's battle for sinking users has changed. "This year, JD's emphasis on the sinking market is different. In previous years, the growth rate of its sinking users has also exceeded that of the market." According to the aforementioned observers.

According to questmobile data, in June 2019, the year-on-year growth rates of the number of sinking monthly live users of Taobao and pinduoduo were 19% and 62% respectively, while that of Jingdong was 16%, lower than the level of the former two. In June 2020, the year-on-year growth rates of Taobao and pinduoduo were 11% and 42% respectively, while the year-on-year growth rate of Jingdong was increased to 24%, far exceeding that of Taobao, while the gap between Taobao and pinduoduo was narrowing.

In particular, compared with last year, JD is the only one of the three enterprises with a year-on-year growth trend. This means that JD is "grabbing" the user growth space of the first two.

In addition, with the increase of Jingdong's penetration rate in the sinking market, its potential market for user growth is considerable in the future. Questmobile data shows that in the second quarter of this year, the penetration rates of Jingdong in the third tier, fourth tier, fifth tier and lower tier cities were 20%, 18% and 15%, respectively. The penetration rates of pinduoduo and Taobao were 42%, 41% and 35%, respectively. The proportion of mobile Internet users that had not penetrated was 16%, 15% and 13%, and that of users who did not touch the Internet accounted for 22%, 27% and 36%.

"At present, the users who have been penetrated by e-commerce and mobile Internet are expected to become potential users of the sinking market of JD in the future, and there is about 500 million users' growth space in the whole sinking market of JD." "The most important target of this year's Jingdong sinking is user growth," said the aforementioned observer

Systematic subsidence

At the beginning of this year, how will the growth of Jingdong be focused on?

It is understood that as early as the end of last year, Jingdong identified three major battlefields in the future, including sinking market, technical services and international business. In this context, JD has carried out a lot of layout around user growth, revenue growth and mode innovation.

For example, last year, Jingdong put forward the goal of rebuilding a Jingdong household appliance offline, which was the planning of the sinking market based on the development prospect of the whole market. According to the introduction of the exclusive stores in Jingdong village, there are more than 250000 stores in Jingdong village, covering more than 250000 villages and towns.

Chen Haibo pointed out that many aspects of Jingdong's competitiveness are reflected in its sinking. In the past, most of the goods that low-level cities could buy were those in the first tier cities, which formed a huge purchasing power or eliminated the marginal commodities, which would "flow" to the third and fourth tier cities. "However, in Jingdong appliance stores, consumers can enjoy the most innovative products, and their use has improved the quality and quality. At the same time, for the brand business, it can realize the channel sinking and operation efficiency improvement, and the Jingdong home appliance store project can bring more than 100 million sales performance to the brand. "

In addition to Jingdong home appliances, Jingdong 3C digital business will also be directly "connected" to the low-end market users. According to Wang lipin, general manager of offline business department of Jingdong computer digital business department, since the opening of the first Jingdong computer digital exclusive store in August 2018, after the initial exploration period, now the pace of Jingdong computer digital exclusive store is speeding up, and by June this year, it has completed the whole year's goal.

It should be noted that, different from the traditional brand franchise channel stores, the characteristics of Jingdong computer digital exclusive store are not to earn the price difference, and win by the diversification of categories. "After years of precipitation, Jingdong has formed a lot of basic tools, so we are not following the traditional idea of building offline stores, and we are no longer operating with the boss as the center," Wang stressed. Jingdong stores have the same price online and offline, no longer making the idea of "making price difference", but expanding multiple categories to improve users' purchase frequency. "Our core is to be loyal to the consumer complaints of users Please. "

In addition to offline, Jingxi app is the main online force of Jingdong in the sinking market, which is also the main component of Jingdong's sinking strategy. Feng Yan, general manager of Jingxi business unit of Jingdong group, pointed out that based on Jingxi platform, Jingdong aims to create a new "people and goods yard" ecology, so as to complement the layout of Jingdong.

"Jingxi's most important goods are differentiated and linked to the new supply chain for emerging consumer groups, that is, high cost-effective goods, which are specifically reflected in the products directly supplied by factories and directly delivered from the origin," said Feng Yan. "In terms of scenarios, whether it is wechat, online community stores, Jingdong million offline stores, etc., they will cut into Jingxi, and link the marketing methods of users' social interaction Build the ecology of Jingxi sinking. "

According to reports, nearly a year after the launch of Jingxi, its data has maintained a rapid growth. "The growth rate of specialty supply chain manufacturers reached 550% month on month in the second quarter, and 80% of the new users were new users in the sinking market," Feng said. "In terms of growth rate and target group acquisition, Jingxi has basically reached the expectation."

It should be noted that logistics is the "capillary" to reach consumers, whether online or offline, and the role of logistics is indispensable in Jingdong's sinking market strategy. Wu xiongbin, product director of Jingdong express products department, pointed out that at present, Jingdong Logistics has covered 100% of the country's county-level coverage, 99% of the population covered by services, and 90% of the counties and counties have been covered by 24-hour service in thousands of counties and towns. In addition, Jingdong Logistics has 750 logistics centers with a storage area of 18 million square meters. There are 28 Asia-1 intelligent logistics parks with more than 5 million logistics service personnel.

According to the above-mentioned observers, the sinking of Jingdong has its own characteristics and goals. On the one hand, various business units and even functional systems of Jingdong group jointly promote the systematic sinking, forming a situation of multiple business promotion; on the other hand, around the sinking market, urban agglomeration and industrial belt, JD intends to create integrated sinking solutions and set up benchmark projects.

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